Chairman of the House of Representatives Committee on Capital Market and Institutions, Babangida Ibrahim, has disclosed that the chamber will soon pass a law that will allow digital currencies in Nigeria.
The Investments and Securities Act, 2007 (Amendment) Bill, when passed and signed into law, will allow the Securities and Exchange Commission to recognise cryptocurrency and other digital funds as capital for investment.
The proposed law will also define the regulatory roles of the Central Bank of Nigeria and SEC regarding digital currency.
Ibrahim had on Wednesday laid reports on bills seeking to make reforms in the capital market.
One of the legislations was titled, ‘A Bill for an Act to Repeal the Chartered Institute of Stockbrokers Act, Cap. C9, Laws of the Federation of Nigeria, 2004 and Provide for Establishment of Chartered Institute of Securities and Investments; and for Related Matters.’
The other was titled, ‘A Bill for an Act to Repeal the Investments and Securities Act, 2007 and Enact the Investments and Securities Bill to Establish Securities and Exchange Commission as the Apex Regulatory Authority for the Nigerian Capital Market as well as Regulation of the Market to ensure Capital Formation, the Protection of the Market to ensure Capital Formation, the Protection of Investors, Maintain Fair, Efficient and Transparent Market and Reduction of Systematic Risk.’
Following the #EndSARS protests, the CBN had ordered banks and other financial institutions to identify persons and entities operating cryptocurrency exchanges and close all such accounts. The apex bank stated that dealing with cryptocurrencies and facilitating payments through them are illegal in the country.
Ibrahim, in an interview with our correspondent on the bills on Saturday, pointed out that Nigeria must flow with global economic innovations.
He said, “Like I said earlier during the second reading, we need an efficient and vibrant capital market in Nigeria. For us to do that, we have to be up to date global practices. In recent time, there are a lot of changes within the capital market, especially with the introduction of digital currencies, commodity exchanges and so many other things that are essential, that need to be captured in the new Act. Like I said, it is better to talk about this after consideration of the reports.
“When it comes to digital currencies, they have different names and it depends on the jurisdiction. These currencies, they don’t have boundaries. You can stay here in Nigeria and invest in the United States, Canada or anywhere.
“They are digital. That is why – if you remember – when crypto currency was initially banned in Nigeria, the CBN discovered that most of these investors don’t even use local accounts. So, they are not within the jurisdiction of the CBN. Because they are not using local accounts, there is no way the CBN can check them.
“All these are some of the issues that we have considered we have to regulate them. It is not that they are illegal but we don’t have regulation for them. So, these are some of the reasons why we need to review the Act and put some regulations for most of the activities – derivatives, commodity exchanges, digital currencies and so many other things.
“It is not about lifting of the ban, we are looking at the legality: what is legal and what is within the framework of our operations in Nigeria. The CBN is regulating financial markets and the Securities Exchange Commission regulates the capital market.